St. Louis economic development officials are finalizing a map to guide where property tax abatement will be offered in the city as part of a months-long effort to establish more parameters for the commonly used incentive.
St. Louis Development Corp. officials are seeking feedback from members of the St. Louis Board of Aldermen, city legislators say, in an effort to get a document ready in time for the board鈥檚 return to session in September.
鈥淚n terms of giving people more confidence that we鈥檙e using tax abatement appropriately, the map would go a long way,鈥 said Alderman Scott Ogilvie, a member of board鈥檚 Housing, Urban Development and Zoning committee, which sometimes considers larger abatement projects. 鈥淪o I hope we adopt it soon.鈥
The effort is part of a years-long debate over the city鈥檚 prolific use of tax abatement and other incentives, which freeze property assessments when investors plan to put money into new development. Some have questioned their necessity in strong neighborhoods, but others point out they often help developers and rehabbers finance projects and that it encourages new investment in a city that needs it.
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Tax abatement typically lasts up to a decade. The St. Louis comptroller鈥檚 office found that the city did not collect nearly $30 million in revenue last year due to property tax abatement. About 60 percent of property tax revenue goes to St. Louis Public Schools, which has no say in whether the incentives are granted.
The amount of forgone tax revenue is up from $17 million initially reported.聽
In May, Alderman Shane Cohn, the chair of the Neighborhood Development Committee that sees the bulk of tax abatement requests, said on Twitter that he would hold up abatement bills in his committee.
鈥淭hat鈥檚 it, folks!鈥 he wrote, linking to an article about a downgrade to the city鈥檚 credit. 鈥淣o more tax abatement in the central corridor. Period. Not in my committee.鈥
Cohn told the Post-Dispatch this week the ultimatum was intended to put pressure on officials to develop 鈥渁 consistent policy鈥 on incentive use. He also wants a new plan to better direct incentives in areas truly struggling with disinvestment, particularly north St. Louis and the southeast swath of the city.
鈥淲e needed more consistent guidelines and we needed to put more emphasis on investing in areas that are being disinvested,鈥 Cohn said.
Cohn said the abatement map has been shown to about 10 aldermen, most of whom are supportive.
He鈥檚 鈥済uardedly optimistic鈥 with the progress that鈥檚 been made in recent months and hopes he won鈥檛 have to continue holding up tax abatement bills in his committee when the Board of Aldermen is back in session starting next month.
St. Louis Development Corp. Director Otis Williams said each request for tax abatement will still be made on a case-by-case basis and that there can still be 鈥渟pecial cases鈥 that don鈥檛 fit into the recommendations outlined in the map.
鈥淭he map will continue to evolve based on actual data, and it鈥檚 only a guide,鈥 Williams said. But, he added, 鈥渋t is a way for us to have a baseline going forward.鈥
Meanwhile, the city economic development board that vets requests for tax abatement made a slight change to its procedures that could make it more difficult for property owners to win tax breaks from aldermen when staff says the incentive isn鈥檛 necessary.
LCRA will no longer blight properties and submit redevelopment plans to aldermen when it recommends no tax abatement, required steps in the process before real estate tax breaks are awarded.
The city agency responsible for reviewing tax break requests is recommending fewer, but some aldermen have ignored them.聽
The city鈥檚 Land Clearance for Redevelopment Authority had continued to approve the procedural steps for property owners to obtain tax abatement even when its staff said projects didn鈥檛 require the incentive to move forward.
鈥淥ne of the things that鈥檚 come up, we鈥檝e all scratched our head, is why are we blighting areas in a redevelopment area if we鈥檙e not going to grant a tax incentive or tax abatement for that,鈥 LCRA board chair Chris Goodson said at a meeting last month. 鈥淚t鈥檚 been a healthy discussion here. I know the staff and the mayor鈥檚 office have had a healthy discussion.鈥
When the LCRA board was still passing blighting and redevelopment plans on to aldermen despite negative recommendations for tax abatement, some aldermen were then amending the plans submitted to the board and adding tax abatement into the board bills required for final tax abatement approval.
Ultimate authority to pass tax abatement still rests with aldermen, and the state law would allow them to institute their own blighting and tax abatement process as opposed to the LCRA beginning the process.
But LCRA鈥檚 decision to no longer pass requests with negative recommendations on to aldermen won鈥檛 make the process any easier.
Board that recommends tax breaks for redevelopment offering more projects partial abatement so new money comes in faster.聽
The move is the latest policy change at LCRA. In the last couple of years, the board has stopped recommending full tax abatement except for properties in the weakest neighborhoods. In an effort to generate some new revenue immediately, it has opted to abate only a portion of property taxes.